"Intelligent disintermediation" is a concept very dear to Fabrizio Viola, CEO of Monte dei Paschi di Siena, and represents the idea of tackling the essential reduction of the funding gap, i.e. the gap between the size of loans and the amount of funding in bank balance sheets, safeguarding the inflow of capital to the production system.
With this in mind, the "Fondo Minibond Pmi Italia" was launched, the first fund that invests in minibonds on the Italian market, for the benefit of those small and medium-sized enterprises which make up 68% of the added value and 80% of the national occupation. These are therefore provided with an alternative financing channel to the bank one in the full awareness that today's contingencies will probably persist tomorrow, due to the implementation of Basel 3.
Viola himself was personally involved in the product presentation and promotion roadshow, which yesterday stopped in Rome at the Montepaschi headquarters in via Minghetti, assisted by Andrea de Vido, managing director of Finanziaria Internazionale sgr and Vincenzo Boccia, vice president of Confindustria, representing the main institutions responsible for the initiative.
The Fund takes the form of an instrument aimed at raising capital from qualified investors only (therefore including private self-certified professional investors, in addition to institutional investors) with investment targets mainly in listed minibonds issued by Italian SMEs, including unlisted ones, or non-listed minibonds listed provided they are issued by Italian SMEs whose shares are traded on regulated markets.
The sum allocated to each entrepreneurial project should average between 3 and 5 million euros, rising to a maximum of 10. The Fund has a maximum endowment of 150 million euros, sufficient on average to meet the needs of 30-50 businesses.
This solution is made possible and draws impetus from the new regulatory framework designed by law 134 of 2012. First, unlisted companies can now proceed with bond issues as an exception to the limits imposed by art. 2412 of the Italian Civil Code (twice the share capital + legal reserve + available reserves) provided that the aforementioned issues are listed. This makes it possible to circumvent the well-known low capitalization of SMEs. Second, the tax obstacles to the use of corporate bonds have been eliminated, in addition introducing the deductibility of interest expense (within the limit of 30% of the EBITDA) for the issuing companies.
The combination of listed minibonds and the destination aimed at qualified investors only, allows companies to benefit from particularly simplified procedures, also with reference to access to the Italian Stock Exchange.
The Fund will be promoted and managed by Finanziaria Internazionale Investments Sgr and placed together with Banca Monte dei Paschi di Siena, which will play the role of advisor to the issuing companies, accompanying them in the activity necessary for access to the Fund.
In the case of unlisted companies, the listing will take place on the Extramot Pro segment of Borsa Italiana, a platform set up ad hoc for the negotiation of corporate bonds, commercial bills or "project bonds" to support the funding needs of companies.
Montepaschi will also carry out a pre-selection analysis of the candidate companies, submitting the approved candidates to Finanziaria Internazionale. Once this initial screening phase has been completed, the asset management company's investment analysis department will conduct its own analysis of the deserving companies identified on a preliminary basis, which will be accompanied by an analysis by the independent rating company Crif (rating unsolicited, i.e. measured on the basis of public information which does not absorb managerial resources of the company under examination) and from a sector survey carried out by Prometeia.
The participation of different subjects in the evaluation process ensures that multiplicity of views which constitutes an important guarantee for subscribers of the Fund.
The Fund reserves the right to support only investment plans or the financing of working capital; therefore, the contribution of funds to consolidate existing debts will not be admitted, much less, Monte dei Paschi is keen to clarify, if they exist towards him.
As regards sectoral constraints, the Fund's policies exclude investments in the property/real estate sector and in financial services.
From the investor's point of view, it is a question of taking advantage of a closed-end investment fund, specialized in the evaluation and construction of mini-bond portfolios, which makes available another asset class in which to diversify without the need to carry out its own risk analyses, which in the case of minibonds, they would have costs that are not proportionate to the average size of the issues.
The duration of the Fund is seven years and the minimum subscription amount is 50 thousand euros (the minimum compatible with the legal nature of the fund).
The minibonds will be structured as senior unsecured securities (which from the company's point of view means no guarantees will be requested), with a maximum maturity of 5 years, but which provide for the gradual repayment of the principal after a suitable pre-amortization period. This latter feature reduces the average financial duration of the investment, and alleviates the illiquidity of minibonds due to the still limited size of the market.
The coupons are fixed rate and the yield is assumed to be 6-7% net, after deducting management costs which fluctuate between 0,9% and 1,20% of the nav.
the rate paid qualifies the minibonds as belonging to the high yield segment, however Mps specifies that the riskiness inherent in the minibonds selected by the Fund is much lower, both for diversification of the investment portfolio and for the quality of the projects and businesses financed. However, the question remains how far the market can be expanded without easing selection requirements.
